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Ruling

Subject: Clothing expenditure

Question:

Are you entitled to claim a deduction for any of your clothing expenditure as a work related expense?

Answer:

No.

This ruling applies for the following periods:

Year ended 30 June 2012

Year ending 30 June 2013

Year ending 30 June 2014

Year ending 30 June 2015

Year ending 30 June 2016

The scheme commences on:

01 July 2011

Relevant facts and circumstances

You are an employee.

You are required to be well presented whilst undertaking your employment duties.

There have been many occasions when you have been required to change clothing several times throughout the day whilst undertaking your employment duties.

You have incurred costs in purchasing and maintaining the additional clothing to carry out your employment duties.

Your additional clothing is not the normal attire that you would wear in day to day life.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 8-1.

Reasons for decision

Section 8-1 of the Income Tax Assessment Act 1997 (ITAA 1997) allows a deduction for all losses and outgoings to the extent to which they are incurred in gaining or producing assessable income except where the outgoings are of a capital, private or domestic nature.

Taxation Ruling TR 97/12 examines the deductibility of expenses for clothing purchased for work related purposes. Expenditure on clothing is generally considered to be essentially an item of private expenditure unless the clothing is incidental and relevant to your occupation. Expenditure on clothing which is in the nature of a uniform prescribed by the employer (such as a bus conductor's uniform) or is protective in nature (for example, overalls worn by a furnace worker or operating gowns worn by a surgeon) is deductible.

However, expenditure on conventional clothing (that is, clothing of a type which is usually worn by men or women regardless of their occupation) is considered to be private in nature and is not deductible.

In Case 72/96 96 ATC 640; AAT Case 11455 (1996) 34 ATR 1098, a television newsreader sought a deduction for hairdressing, make-up, clothing and jewellery on the basis that it was incurred in gaining or producing her assessable income. The taxpayer had contended that the clothing was bought for use on camera and was unsuitable for private use. The items included suits, shirts, shoes, dresses and jackets.

The Administrative Appeals Tribunal decided that the items of clothing were of the type that any professional or business woman might purchase to wear to work. The particular clothing purchased was not specified by the employer. The taxpayer chose the clothing that she knew from experience would look good on television, but that alone was not enough to make the expenditure deductible.

The case was distinguished from FC of T v. Edwards (1994) 49 FCR 318; 94 ATC 4255; (1194) 28 ATR 87 (Edward's case) on the basis of the nature of the clothing concerned. In Edward's case, the clothing was mainly hats, gloves and full evening dresses rather than the components of a conventional high quality working wardrobe. Ms Edwards sought a deduction for clothing suitable for wearing on formal occasions outside the normal range of employment activities. They were items which had to be added to her normal working wardrobe.

In your case, you have indicated that your preferred choice of clothing is more casual than the clothing that you wear when carrying out your employment duties; however this, no doubt, applies for many people who work in a professional environment. The fact that you wear certain clothing to work and dress differently outside of the work environment is not enough to change the character of the expenditure from a private expense to one that is incurred in earning assessable income.

Accordingly the cost of your clothing, purchased to carry out your employment duties, is considered to be a private expense. Therefore you are not entitled to a deduction for any of these expenses under section 8-1 of the ITAA 1997.